SIE EXAMS QUESTIONS WITH PRECISE ACCURATE
SOLUTIONS /UPDATED 2026/GRADED A+
A broker-dealer who buys and sells for its own account is acting as a(n):
A
Agent
B
Syndicate
C
Underwriter
D
Principal - -ANS☑️☑️--D
Principal
A client has $10,000 cash available in their cash account with XYZ broker-dealer.
On Tuesday the client purchases $15,000 of ABC stock, intending on sending a
payment of $5,000 by Thursday through an electronic funds transfer. On
Wednesday, ABC stock has a sizable increase in price due to a rumor of a potential
merger. The client decides to sell the shares of ABC stock for $20,000 on
Wednesday. What violation has the client engaged in?
A
Ghosting
B
Backing away
C
Freeriding
,D
Front running - -ANS☑️☑️--C
Freeriding
A client is considering saving money for their child's education. The client wants
the money to grow on a tax-deferred basis but wants to retain the ability to use
the investment for both private high school and college expenses. Which of the
following options would be the best vehicle for this investor?
A
Coverdell savings account
B
UGMA account
C
403(b) plan
D
Roth IRA - -ANS☑️☑️--A
Coverdell savings account
A client puts $1,000 a month into a variable annuity. The client is considering
decreasing their monthly investments to a quarterly basis. At present, the client
has $275,000 in the annuity and wants to start withdrawing the money upon
retirement. What is the term used to describe the current holdings?
A
Accumulation shares
B
Accumulation units
,C
Annuity units
D
Annuity shares - -ANS☑️☑️--B
Accumulation units
A client puts $1,000 a month into a variable annuity. The client is considering
decreasing their monthly investments to a quarterly basis. At present, the client
has $275,000 in the annuity and wants to start withdrawing the money upon
retirement. What is the term used to describe the current holdings?
A
Annuity units
B
Accumulation units
C
Annuity shares
D
Accumulation shares - -ANS☑️☑️--B
Accumulation units
A 23-year-old recent college graduate has just inherited $28,000 from a family
member. The recent graduate is a novice investor whose only exposure to the
market consists of a few shares of a local utility company given as a gift 15 years
ago. After seeking advice from a registered representative, the investor is unsure
if the suggested 50% stock, 30% bond, 20% cash allocation is the right
investment. Which investment should be made with the funds until the new
investor decides?
, A
Place the funds in a taxable money market
B
Place the funds in a tax-free money market
C
Invest 25% of the money until the investor gets accustomed to the fluctuations of
the market
D
Execute the original plan, since the investor is not knowledgeable enough to hold
a valid opinion - -ANS☑️☑️--A
Place the funds in a taxable money market
A bankers' acceptance is used for which of the following purposes?
A
To finance credit card receivables
B
To guarantee collateral used in creating an ADR
C
To facilitate the trading of foreign exchange
D
To finance a transaction between companies in two separate countries - -
ANS☑️☑️--D
To finance a transaction between companies in two separate countries
A broker-dealer holds client securities with the firm's securities. This practice is:
A
SOLUTIONS /UPDATED 2026/GRADED A+
A broker-dealer who buys and sells for its own account is acting as a(n):
A
Agent
B
Syndicate
C
Underwriter
D
Principal - -ANS☑️☑️--D
Principal
A client has $10,000 cash available in their cash account with XYZ broker-dealer.
On Tuesday the client purchases $15,000 of ABC stock, intending on sending a
payment of $5,000 by Thursday through an electronic funds transfer. On
Wednesday, ABC stock has a sizable increase in price due to a rumor of a potential
merger. The client decides to sell the shares of ABC stock for $20,000 on
Wednesday. What violation has the client engaged in?
A
Ghosting
B
Backing away
C
Freeriding
,D
Front running - -ANS☑️☑️--C
Freeriding
A client is considering saving money for their child's education. The client wants
the money to grow on a tax-deferred basis but wants to retain the ability to use
the investment for both private high school and college expenses. Which of the
following options would be the best vehicle for this investor?
A
Coverdell savings account
B
UGMA account
C
403(b) plan
D
Roth IRA - -ANS☑️☑️--A
Coverdell savings account
A client puts $1,000 a month into a variable annuity. The client is considering
decreasing their monthly investments to a quarterly basis. At present, the client
has $275,000 in the annuity and wants to start withdrawing the money upon
retirement. What is the term used to describe the current holdings?
A
Accumulation shares
B
Accumulation units
,C
Annuity units
D
Annuity shares - -ANS☑️☑️--B
Accumulation units
A client puts $1,000 a month into a variable annuity. The client is considering
decreasing their monthly investments to a quarterly basis. At present, the client
has $275,000 in the annuity and wants to start withdrawing the money upon
retirement. What is the term used to describe the current holdings?
A
Annuity units
B
Accumulation units
C
Annuity shares
D
Accumulation shares - -ANS☑️☑️--B
Accumulation units
A 23-year-old recent college graduate has just inherited $28,000 from a family
member. The recent graduate is a novice investor whose only exposure to the
market consists of a few shares of a local utility company given as a gift 15 years
ago. After seeking advice from a registered representative, the investor is unsure
if the suggested 50% stock, 30% bond, 20% cash allocation is the right
investment. Which investment should be made with the funds until the new
investor decides?
, A
Place the funds in a taxable money market
B
Place the funds in a tax-free money market
C
Invest 25% of the money until the investor gets accustomed to the fluctuations of
the market
D
Execute the original plan, since the investor is not knowledgeable enough to hold
a valid opinion - -ANS☑️☑️--A
Place the funds in a taxable money market
A bankers' acceptance is used for which of the following purposes?
A
To finance credit card receivables
B
To guarantee collateral used in creating an ADR
C
To facilitate the trading of foreign exchange
D
To finance a transaction between companies in two separate countries - -
ANS☑️☑️--D
To finance a transaction between companies in two separate countries
A broker-dealer holds client securities with the firm's securities. This practice is:
A
